tv Washington Journal CSPAN December 11, 2012 7:00am-10:00am EST
at 9:15 eastern, more about the issue. host: good morning on this tuesday, december 11, 2012. 21 days to avert tax hikes in our automatic spending cuts. both sides say the line of communication remain open between the speaker and the president. president obama took his argument to michigan yesterday, where he also weighed in on a right to work all that's making its way through the state today -- a right to work law. do you support or oppose those laws? michigan will become the
24th state to have one. the phone lines are open. also, send us a tweet or a facebook post, or send us an e- mail. here's what the president said yesterday in michigan. [video clip] >> these right to work law don't have to do with economics. they have everything to do with politics. what they are really talking about is giving you the right to work for less money. [cheers and applause] you only have to look to michigan, where workers were instrumental in reviving the auto industry and to see how unions have helped to build not just a straw upper-middle-class but a stronger america -- stronger middle-class but a stronger america.
people and should be focused on the same pink. they should be working to make sure companies like this manufacturer is able to make more great products. that's what they should be focused on. host: distorts free press, courtesy of the newseum in washington, as this headline -- some schools are closed in the state so teachers can also protests that block today. here is the detroit news. there headline --
is it eddie? i'm sorry. good morning. caller: good morning. i live in a work state and does not benefit the employer is at all. a company just moved into it charleston, boeing. they had the first test flight or three months ago on the 787. that was catastrophic. the wheel well caught on fire. other things did not work that were supposed to put out the fire instantly. it's not about quantity.
it is quality. you need experienced union people. the unions have built this country and it will continue on , no matter what these guys try to do. >host: why would union workers be better qualified? caller: these people in charleston got to have the experience. i have seen many generations of different aircraft. you had little glitches on the panel and stuff like that, which were fixable. but this, i think they even had another issue to emerge on the 787 that was built here in charleston. host: all right, that was referring to a story many of you
will remember about it when the labor board weighed in on whether boeing could move from washington state to south carolina. damian in houston, texas, independent caller. . caller: good morning. texas is a right to work state. right to work states tended to victimize the employees. is employers don't have what a level standards for employment and it tends to create a high turnover, a love of the discrimination in the workplace -- a lot of discrimination. people feel they are not secure in their job and they often end up leaving or are fired because they are required to do so much for so little and it tends to make one feel as though things
have right-to-work laws. caller: i see the statistics, but i think sometimes the statistics are manipulated in a way. although these states appeared to be productive, there's a lot of criteria involved that may not be evaluated. and sometimes, even in a system where there appears to be a very high rate of productivity and business growth, they're not telling the whole story. host: that is echoed in this piece in the washington post that was on our website yesterday. it goes through several different things.
dying entity in america, and i think companies realize when you have a union in place it impedes what to their particular goal is. that is not something necessarily for the benefit of both parties, meaning the employer and the employee. if so, yes, i think they will go to whatever measure they can do so they can run the show with as little regulation as possible. host: nelson is a democratic caller in massachusetts. caller: i have worked in florida and in new england. even though i am a registered republican, the right-to-work states, doylestown to people making -- it boils down to
people making profits. the union is a small factor in right-to-work states. it is almost nonexistent in florida. if someone wants a workplace where they have some rights, then they should oppose the right-to-work states. host: have you seen it firsthand? caller: in florida there are contractors. someone i knew went to work for almost a week and then they decided not to pay him. he tried all kinds of ways, the labor board and everything else, but they totally ignored it. he never saw his money even though he had worked. host: deborah in michigan, democratic caller. caller: i am in the lower
middle of the state. host: what do you make about your state possibly about to become the 24th state to get a right-to-work law? caller: i am a democratic voter and i did support the democrats. but 24 states now have ratified this law, and the democrats have sat by and watched the republicans steamrolled this legislation through state-by- state. now finally they are getting to our state, which is probably the embodiment of unionization. at some junction of the democrats will get tired of donating and supporting while the democratic politicians sit and do nothing. if 6%publicans don't care of the public supports anything. they will steamroll what they
want through. the democrats, from voting laws and their bidding else, the democrats will have to learn to expand their party, to stand up and fight for the people who vote for them. this is nothing new. you have the right to cut your nose off to spite your face. is there any ceo in this land who will go into court without a bunch of lawyers to protect him? but they want people to be stupid enough to give up their rights. that's all i have to say. i hope the democratic politicians realize this. they need to wake up and smell the coffee and start fighting and doing the same king the republicans where they get their money and their base from that the republicans are doing to the democrats. host: what do you make of your governor? he has changed his mind on this. he initially wanted to avoid the
issue. caller: we have democratic politicians here that are so surprised that he changed his mind. are they really? is there one democrat that is dumb enough to believe anything the republicans says? sorry to put in that context, but this is nothing new. these politicians should not be that surprised. host: from the new york times, the republican governor --
gabrielle in d.c., independent. -- gabriel. theer: it's one more way in unions, or what used to being and unions representing people, are being taken advantage of. again, it is always something. it seems there's the profit margins becoming so much more important to every corporation and the workers are pushed off to the side. this mentality is perpetuated throughout. this is what the right does constantly in congress. i don't mean the unions that have the thug mentality like jimmy hoffa, but the ones that have the potential to represent people and a meaningful
representation of who they are and what they have given to companies and profits over years, their service, they stand to do a good job for them. some have abused it, but now it's completely takes the rug out from under them and further diminishes their capabilities. host: i need to learn how to read names, so i'm sorry about that. bonnnie in middleton, new jersey. democratic caller . caller: we have gone back to the robber baron days. anyone depending on a paycheck, they have been had. we fought and people lost their lives to form unions. unions are the base and the soul of the working class. without them we have nothing. companies like mcdonald's and pizza hut have seen 130% profits
for the last four years by their employees making more than minimum weight -- but are there employees making minimal wage? do they have any dignity or respect? no. it's not only low-wage workers. now with college students graduating. our wages have not been this low since the last leg republican depression. considering our economy is over 70%, if the expense over 70% on consumerism -- they have spent over 70% on consumerism. there's nobody with money to spend. they don't have to pay taxes on their profits. they get all kinds of rewards and the of the people working for them get nothing. the people of that state have to
pick up the cost so that they don't -- and everybody complains about welfare, which is not welfare any longer, is an assistance program and food stamps and medicaid for the children so they don't die without health services. and we are paying for it while the robber barons are profiting. host: this on twitter -- and we are posting a poll for all of you to take on our facebook page on whether you support or oppose right-to-work laws. 32 people support them so far with 31 people opposing. in wisconsin, independent caller richard. caller: i am 65 years old. i am going to tell you people that even with disabilities and all the problems i have had, i was refused by selective
service. so i had the opportunity to work at a corporation which became mercury marine in wisconsin. when i was there, people that were there for like 20 years, they would come up to me and say you don't have to bust your ass, you are going to be in the union, just take your time,, all you have to do is punch the time clock. i will tell you what has happened. the unions became so prayerful and the demands that they made, they forced the employers to leave the state or to move overseas or to start businesses overseas. there is a book that this doctor his name is mallory factor, he wrote this book called "the shadowb bosses." i recommend c-span have this author on washington journal so
that people can understand the corruption in unions. it is sickening. host: corruption aside, do you think unions push for higher wages, and is that a good thing? caller: here is my opinion. what has happened is the union's no longer have the kind of power they once had. the reason why they don't is because over a long period of time they made such demands that the employer told the state, told the municipalities that if you don't work with us, we have no choice but to go to a place where we can survive. and so, they ended up either keing to other states liikjke mercury marine, the end of going
to oklahoma. host: the new york times editorial page is also weighing in on this. got to get to some other news this morning as we continue our conversation about right-to-work laws, now on the fiscal cliff. here's the wall street journal -- but then here's the "washington times this morning with their deadline -- headline --
talks. the polls out, this is one from gallup. and the new york post shows this poll -- back to our topic, our question, do you support or oppose right-to-work laws? paul in utica, michigan, democrat. caller: i live in suburban detroit. i am a retired union worker, not automotive, by the way. i don't think my union is a thug in any way, but i think it's a sad day for the state of michigan. if the workers in this country cannot look to michigan like they always have, for a decent
pay, and i think that is where we are headed, i just think it is a sad day. all the people who voted for these republicans, they are going to get what they asked for. this is what is going on here. i really sad about it. host: the car czar for michigan said it's a choice between your jobs and higher wages or more jobs and lower wages. ay we may end up with lower wages. it is a move in the wrong direction. i think we would have gotten more jobs year even without this. as the automotive and the economy grew here. i think it was on its way. i did not think we needed this. so, a dollar per hour jobs, you
cannot raise families on $8 or $12. is too bad that's the way we are going host: you are in the union? caller: i'm a lifetime member. i am a telephone worker, 35 years. our union did not run the company. the company ran the union. but i think that it was a good thing, and i never knew any thugs. i was involved in it myself and i never knew any corruption in it. i think unions uplift workers. without it, if we are all in the race to the bottom. host: how much were your fees? caller: they were probably $5 to $10 a week. it came out of our pay. that's about all it was. for that, maybe we got an extra dollar or two per hour ove3r a
nonunion place. it was something that uplifted everyone. we were able to live a decent middle-class type of life. host: you mind telling me how much you made per year? caller: i am retired, but when i left it was about $50,000 per year. that was 10 years ago. host: now republican caller in michigan as well, dan. caller: i personally think the right-to-work state is a good issue. i work with the company now that forces you to be a union member. you have no choice. from what i have seen and when i have experienced -- and my father was a longtime union member, a member of the teamsters, and he also worked for aerospace, and he went
through this stuff in the 1930's. the problems then called for unionization. the problem we have now is they are more or less a political arm. they spend the members money without asking the members where they wanted to go. the uaw, which i belong to, there are untold numbers that are not satisfied with the membership or the management. it is a sad state of affairs. host: how much are your fees? caller: two hours worth of wages per month. host: and you don't think you are getting your money's worth? caller: and the uaw is $14 an hour.
host: that compares to what? caller: the job i had before in detroit i was making $24.84 an hour, five years ago. i was a warehouse supervisor. host: nonunion? caller: it was voted down three consecutive times. host: here's an e-mail from bob and florida. making the economic argument against right-to-work state. and then there are people who
have an economic argument on the other side of it. if we read a piece earlier in the washington post on what right-to-work states due to the broader economy. -- due to the state's economy? and now this isn't egypt. on the front page of the washington post, amid this turmoil, aid for egypt is on its way. the u.s. and a coalition of international lenders are pushing ahead with billions of dollars of loans and other help for egypt and neighboring states.
so, money going to the country despite the violence there. and on the domestic front, the richmond times dispatch, courtesy of the newseum, health care law includes from a surprising $60 coverage free. bob in rapid city, south dakota, republican caller. caller: whee are a right-to- work state. in the past week we had an article in the newspaper that we
are 16th in the nation in income. we averaged 44,000. where is the nation averages 41,000. so it's just not true that a right-to-work state means lower income. our unemployment rate is around 5% or 5.2. host: 4.5%, according to this washington times piece this morning. caller: our union membership in the state is 5.6%. so it is not very high. we have three of the poorest counties in the country, and south dakota, also. those are primarily indian reservations. without those numbers pulling the numbers down, we would be even higher than that. desk because you are a right-to- work state does not mean you are giving up anything in the labor
force. -- just because. host: in north dakota the natural gas and oil industry has really boomed in the last few years. is that the case in south dakota? caller: we get a little bit of that, particularly in western south dakota, because it flows into the northwestern part of the state. we are primarily an agricultural state. the agriculture has been pretty high lately. that is a contributing factor, certainly. the fact that you are a right- to-work status 9 necessarily mean you're giving up anything. i went to the bureau of labor statistics. it showed the average union worker makes $209 more per week than non-union labor. but it does not seem to affect us in south dakota. host: all right. stella on twitter --
and allison says -- gillian in little rock, democratic caller. caller: it should be called a right to farm state. right to fire state. they are firing people without the people having any recourse. of the states that still have unions, let them know they are going to become the right to fire states. host: dennis now, an independent
scholar. caller: good morning. i was an engineer 30 years, so i was kind of in the middle of this management and union type thing. i worked for three fortune 500 companies and three smaller companies. so i have seen companies with unions and without unions and unions trying to come in. i have been through pretty much a whole shebang. i ended my career as a vice president of engineering. my thoughts, from seeing all this, from an independent point of view, is the company should offer profit sharing to the people. if they want to give everybody a piece of the pie, give them some profit-sharing, because i have seen people go years without pay. selective people get higher pay
because they are liked, etc.. host: what do you think that would do, for company to do that, what happens to them over time? what is the benefit of profit sharing? caller: the benefit is the better the workers do, the better the company does. everybody does better. it's very simple. but if i could say one more thing, you previously had the thing about representatives in , people coming up against john boehner. apparently there is a union forming within the republican congress to oust their leader, their boss. so that is an independent point of view. host: all right, some other headlines. the washington post reports that
fedex yesterday said it was the busiest day in history with the company moving 19 million packages,% increase over last year driven largely by online shopping. also on, in a follow-up to our store yesterday about pay at fannie mae and freddie mac, a washington post reports that oversight is being saw to review the pay of those executives at those agencies. -- being sought. back to our question for all of you. larry in memphis, tennessee, democratic caller. caller: good morning.
i live in tennessee, a right-to- work state. we have the third lowest wages in the country. it is a race to the bottom. my job was union and we were making $16 an hour. it went overseas. the company would prefer to go to china and a somebody $2 a day or whatever. these right-to-work states are full of temporary jobs agencies with contracts. the stamp services -- these temporary services are making money and paying people a fraction. we need to let politicians go to a temporary service and give them half of what they are making and make them see how we feel. people working for small amounts of money at temp services. ynette.ow to panetta, conwalive
caller: they call it a right-to- work states, but i guess the language got changed, because it used to be a free will state. the employers without unions had the right to fire you for anything, any reason or no reason at all, and you had no recourse. so i still believe in unions and i still believe the people should have a right to join or not. host: this tweet -- are you with us? caller: i am. host: higher wages of less jobs
in the state's. caller: yes, but most of the jobs in this area, in the myrtle beach area, those are minimum- wage jobs, where i live. if we are talking about the unions giving them higher wages, i'm sure i would like to make more than $7.35. but they can fire you for any reason or no reason and you have no recourse. host: ok. overseas, the headline in the new york times -- " so that latest on syria. in afghanistan, the pentagon has tracked a slight rise in afghan attacks.
then yesterday, six states were approved by the centers for medicaid and medicare services on track under federal guidelines to operate in an exchange during open enrollment next october apparen. up next, we are going to turn our attention to the fiscal cliff with jim doyle and get a business perspective on that. later on, looking at the different aspects of the fiscal cliff talks. a closer look at domestic spending. we will be right back. >> ♪
[video clip] >> give it to him hard. >> he is not safe on that bus. >> i've been on that bus. they are just as good as gold. >> all of us in this country are starting to see people coming out and talking about their experience of this phenomenon that so many of us have experienced in one way or another and have had no words for, other than adolescents, other than growing up. finally people are starting to say, this is not actually ia normal part of growing up. moment where there's a possibility for change. we decided to start the movie
out of that feeling that voices were bubbling up to the surface to say this is not something we can accept any more as a normal part of our culture. >> the filmmaker has followed up her award winning film by gathering essays and stories together in "bully." hear more saturday night. and find more "book tv" on line and like us on facebook. >> "washington journal" continues. . host: dingell is the president and ceo of business forward. let's begin with what is business forward. guest: it's an organization with a very simple mission. our job is to try to make it easier for business leaders around the country who care about policy issues but don't have a washington office or a lobbyist in town to speak out on issues on public policy. host: is this a brand-new
organization? guest: we have been around 3 and 1/2 years. we are supported by some of the biggest companies in the world but our business leaders -- our target audience is business leaders all around the country. we go out to them and try to get them more involved in policy- making. we bring administration officials, members of congress, governors out to cities around the country to do briefings with business leaders. we also bring those business leaders to washington and the president's economic team and tell them how to grow jobs and help the economy. host: what did the business leaders say to the president and how did that come about? guest: we have been doing this a year now when we brought in 50 different groups to the white house to talk to the president's economic advisers. related to the fiscal cliff, the last eight or nine meetings. and business leaders representing 32 states we have brought to the white house.
the message they're getting is pretty consistent with simpson- bowles and with fixing the debt and with how the business relationship is characterized in the media. they're anxious for debt deal, because they want certainty as quickly as possible. they tend to use simpson-bowles as their frame of reference. the question is not whether it's the democratic or republican plan is better, is which plan is closer to simpson-bowles. host: here is the hill newspaper -- guest: well, [indiscernible] what we do is bring business leaders from around the country to brief the president and his economic team, on health care
reform to immigration reform, the fiscal cliff, intellectual property protection. and the business leaders are speaking for themselves. generally speaking, business leaders are centrists, data driven, results oriented. they are looking for compromise in washington. is it a pro-obama group or republican? it is really its own group. host: who are some of the names people might recognize, the ceo's of which companies? guest: the efforts the white house has made this year is much larger and much more effective than it was last year. they are bringing in more people with business ford but with a lot of other organizations as well. the president spoke with financial services leaders and has brought in two groups of big-name ceos. -- the president has spoken with business forward.
of out of 10 per ceo's small companies. -- tend to be ceo's of small companies. smaller investors, smaller business owners. host: what are the members concerns with the fiscal cliff stocks? guest: for most small-business owners and senior executives at big companies, the fear is that going over the cliff, even on a technical term, will increase their borrowing costs and will put our economic recovery at risk. most business leaders point to simpson-bowles. they understand that we have to raise revenue and we also have to control spending. they generally like the outlines
of the simpson-bowles deal, the principles behind it. spread the cost, protect the most vulnerable, don't disrupt the economic recovery, try to simplify the tax code. they generally support those principles. host: do they believe a recession could happen if we fall off the so called "fiscal cliff?" guest: they do. what we saw last year is business leaders were concerned that washington was not going to come together with a deal. and that it could end badly, but it was a more muted concern. they just trusted washington would get it done. given how quickly things happened last time, they are taking a much more active role. business leaders have come to washington to require a minimum height standard for the ride of the fiscal cliff. they want to make sure that members of either party who are speaking out are as close as
possible to simpson-bowles. talk about real cuts, about real revenue. it's much more and ownership in the process this time. host: where does your group come down on regulations? guest: our job is to go out and get business leaders around the country more involved. the business leaders speak for themselves. business leaders are generally extremely influential in their home markets. there are the kind of people if that can give a member of congress moderate republican or moderate democratic calls on tougher votes. those leaders are increasingly concerned about what going on in washington and they want to get more involved. we also know that technology is developing, social media and all the rest, which makes it easier for someone on route 128 in boston or savannah, georgia, to have a bigger impact. we are seeing the issues are increasingly coming down to a
tough choices, tough choices of business leaders. host: how would they characterize regulations? guest: generally, regulations rank high. you have large financial services companies concerned with dodd-frank. you also have smaller businesses that are concerned the big banks are not lending. so they both have different views on financial services. host: a republican from missouri says -- guest: if you think about that, how difficult it is for small business leader affected by a particular regulation to come to washington and talk to the
finals or talk to congress about the best way to fix it. what we are trying to do is bring business leaders together at scale, so their input can go directly to those who are producing the regulations. on the regulatory front, a person who recently was running the office of regulatory affairs, his team was very aggressive about going out and meeting with business leaders and looking for input. i know it is subject to debate, but he published results before he left the white house staff, which showed the rate of regulatory activity had dropped and that the value of created by eliminating bad regulations or needless regulations and streamlining regulations had gone up when compared to the previous two. two host: we are talking about businesses and the fiscal cliff. we have a fourth line set aside
for business owners. we want to hear from you as well. dave is a republican in cincinnati, ohio. welcome to the conversation. caller: hi. guest: hi. caller: is this jim doyle? guest: yes it is. caller: it is a little different than watching it on television. guest: i'm staring at the camera and pretended it is you. caller: all three of the segments this morning had to do with the fiscal cliff, so i feel i hit the trifecta. my question has to do with each segment. if i could ask the first segment if you could pose this question to the other two guests at in the other two segments. my question is a lot of people, whether they are on tv or
politically or in the newspaper, they have forgotten about 21 new taxes coming up january 1 for relating to obamacare -- i'm sorry, the health care system. this affects all americans, not just high earners or poor people. and my question is, how does this affect the 12 taxes put are going to be on all americans and nine of them, i think, are going to initiate for businesses. so how does that affect any of these negotiations and why is no one bringing up 21 new taxes? the republicans and democrats -- the democrats like to see taxes going up and the republicans don't want to see that.
guest: i think both sides are committed to trying to stop the increase in personal taxes for small business owners. those making less than $250,000 a year, so there's general agreement on that. both sides are concerned about making sure any spending cuts and taxes don't derail the economic recovery. in terms of health care costs related to the aca, while most business leaders that we have spoken to have said is they understand we needed to do something. small-business owners are impacted disproportionately by rising health-care costs. the current health c arpl work for them less well thanlarg companies because they don't have buying power. if you look at some of the reforms, you see a number of
efforts to try to reduce costs for small businesses to, like creating exchanges, for example. small in 2011, small businesses paid 25% more for insurance than large companies. the exchange is meant to help small business. you are right. with the new regulations set to take effect in a couple of years, it is another reason to be careful and protect small businesses from tax increases. what the obama people will tell you is that they have cut taxes for small business 17 times and 90% of the small businesses in america would not be effected by higher individual taxes. host: here is "the miami herald" this morning.
pennsylvania. independent caller. caller: he said it earlier when they go to washington, they try to influence a bunch of things, even immigration reform. my question is how do the ceo's of these big businesses -- what is their outlook on immigration reform, and what do they have to do with that? guest: we are working with more than 300 different officials or members of congress doing programs outside of washington, bringing people from outside washington into washington. it depends from city-to-city. boston business leaders are interested in health care. miami, transportation, san diego, international -- an
intellectual property -- it varies from city-to-city. in terms of immigration reform, what we have seen as different sectors of the economy look at immigration differently. the high-tech community is looking at bringing in more high-skilled workers or keeping graduates in the united states to help them with challenges in computer sciences, for example, or health sciences. you have the hotel industry and the airline industry focused on trying to make sure that travel visas are administered more efficiently so we can bring in more tourists to spend more money. you have the industry sectors with an interest in immigration. our view is immigration reform will be a big issue in 2013 and
you will see big companies across sectors working together, combining shared interests to get something done. host: here is a tweet from one of our viewers -- how does the national debt directly effect businesses, or does it? guest: the big factor to consider in all of this is borrowing costs. we work with our number of large financial services firms, and what they worry about most is what happens if the credit of the united states is diminished through a technical default. the borrowing cost for state and federal governments would rise, and with it the borrowing cost for businesses and that could impact the economic recovery. in terms of the debt, there are various things we have heard consistently.
the do not think any movement over the cliff, where there is a slope or a cliff, whatever you want to call it, is acceptable, and they're worried about borrowing costs. host: north carolina. chris. go ahead. caller: i have had a small business for many years, and in the beginning i took -- i did not take paychecks. finally, 20 years later i met the point where i could sell it, and a mix somewhere around $185,000, and my husband makes about $60,000. with the selling of my business, should i be rushed
because of taxes to sell it before december 31? guest: one of the challenges in dealing with small businesses from washington is there is a wide range of business owners. you are like the vast majority in terms of the amount of money that you earn each year. what you see is different members of congress and the administration coming -- struggling to come up with policies based on a broad definition of small business. the important thing about what we are trying to do is we are trying to make it easier for people like you live in north carolina who have a business to run, and it is tough to come to washington and ask the questions you just asked. we try to make it easy for you. we set up briefings with similarly situated business
leaders, due logistics', taking notes, and that we you know the time he spent has been worthwhile. about 98% of the people that participated in our briefings were happy with what they did to take the time off of work and travel to washington. with regard to your situation, what remains to be seen is how the budget negotiations will effect individual tax rates and corporate tax rates, and a lot that remains to be seen. so, i am sorry i do not have the specific answer, but if you e- mail us at businessfwd.org, i will try to give you answers. host: do the members have to be
democrats? [laughter] guest: our market is business leaders across america who care about these issues. our job is to go out and make it as easy for them to participate directly. there was a spike in business interest in policy in 2008. one out of three were more involved than they had ever been. generally speaking they did not belong to the existing organizations. they wanted to speak for themselves. they hated partisanship. they were more likely to identify themselves as republican. our job is to go out to those people and we work with local chambers, universities, major
employers and identify those people and bring them to washington. our members are more than 40 of the biggest companies -- -- biggest companies in the world. we did not keep track of who is a democrat or republican. a call back to phone calls. ended -- host: back to full cost. gramm, pennsylvania. go ahead. caller: my question is the subject s been absent from discussion on the fiscal cliff, sales cuts on internet transactions, -- sales tax and internet transactions, which have escaped sales tax in many states. is there any way the state
could empower the federal government to impose a national sales tax on all internet sales and services into makeup for what has been a tremendous loss of tax revenue in the past? i think it is out of the fear of a loss of commercial tax because of the internet. what is the real possibility of solving that problem? guest: we have heard more about that issue from members of congress, governors and administration officials than from business leaders themselves, but we understand it is a big issue that could have a big impact on state coffers at a time when state and local coffers are hurting. we do not have a particular position on the issue.
wheat board do in a normal case is if you were at one of our -- what we would do in a normal case is if you were at one of our briefings we would help you get in touch with the office in the treasury department that would be responsible for that, the office in the commerce department that takes input from business leaders like you, and again, if you e-mail us at info@businessfwd. host: from twitter, d you consider yourself a lobbyist? guest: there is lobbying defined by the irs and washington. generally speaking, people at the table speak for themselves,
and not necessarily agree with one another or the administration. we do not take a position, and if you do not take a position, we are not lobbying. we encourage business leaders to get involved, to write to members of congress. that is technically grass-roots lobbying, and we think that is important. we think business leaders are enormously powerful advocates in their home communities, experts on the issue. when a local employer takes a position, it is news. host: also from twitter, jim doyle, were you inside -- some type of business before business forward? guest: i was a lawyer, and i helped companies raise money and go public. i have started and sold two businesses of my own.
i also served in the commerce department for secretary bill daley during the clinton administration and got to see just how effective business leaders could be if you make it easy for them. host: also the communications team for the clinton-gore reelection team. let me find out what members say about the jobless rate. here is "the washington post." it is less than clear that the same can be said about the -- republicans have pointed to a shrinking rate.
the president put the proposal is $50 billion more in stimulus funding. how do the ceo's in your group characterized stimulus funding? guest: it is interesting. there are a large funders, and then there are the business owners from small companies. what we have noticed in 3.5 years is that most business leaders, when they think about the stimulus they assume it was a $1 trillion investment in bridges and light rail. what they do not always know is that about one-third of it in terms of tax relief, was direct aid to states and support for first responders in teachers. -- and teachers. so, there is a lot of misinformation out there about
the stimulus. with regard to the $50 billion in stimulus, most business leaders want to know how it will be spent. they are aware of the fact that we have to protect the recovery and that is why you see a consensus around the fact that there needs to be pain, but we should delay it. with regards to specifics about $50 billion, we do not have that right now. host: brenda, texas. go ahead. caller: i have a specific question. i am wondering how small businesses are dealing with the new health care law in that i work for a small business that has 52 employees, and they told us for this coming year we are ok, but when the health care law comes into effect, they have to
keep full-time employees below 50 saw that it will not affect them because they cannot afford the health care law. they will make a bunch of us into part-time, and cut our hours when the law goes into effect so that they can keep the bottom line and keep making a profit. so, what i'm wondering is are you hearing a lot of them from small business? host: jim doyle? guest: we hear a lot of small businesses holding off on hiring people not just because of the implementation of the health care law, but the fear of rising health-care costs. if your grocery bill grew with the same rate that health-care costs have grown since 1945, we would pay $48 for a gallon of
milk, and more than that for a carton of eggs. what we have seen is business leaders say their employees are efficient and production -- and productive, and rather than giving them higher salaries, they are spending more on health care. aca is implemented, it will be felt in states that have not implemented exchanges. we hear every day how much health care costs are effecting business decisions. we are trying to make sure that input from companies like yours gets to washington and washington reacts. host: atlanta, georgia.
independent caller. caller: my first observation is i thought you said your organization predated the obama administration. guest: the reference to the word "forward" and how do you obama administration used in the campaign, but we have been named in 2009. host: he was saying before the reelection campaign. caller: the small business groups you represent, where their feelings about tax reform, and specifically what they support a national sales tax? i supported in gary johnson.
regarding the affordable care act, will your membership consider abandoning -- providing health care or health insurance for employees and letting them deal with these exchanges in order to save money? my understanding is the affordable care act is onerous on small business. thank you. guest: . right. just to clarify, we are trying to help business leaders like you speak for yourself. we do not take positions on particular provisions. if we are doing something on the affordable care act for tax reform in general, our job is to bring as many talented business people as beacon to washington and have them speak for themselves -- as we can to washington to have them speak for themselves. in terms of tax reform, you are talking on something that is
difficult because there is a wide range of small businesses for washington to react. is it like a small business in north carolina, where the net revenue is summer in the area of two hundred thousand dollars, or someone that owns 546 burger king franchisees? we try to bring more business -- 5 or 6 burger king franchisees. we try to bring business leaders to washington. what we notice on both sides of the fiscal cliff is that there is widespread belief among small-business owners that because a lot of their earnings as ordinary income as opposed to capital gains, they are disadvantaged.
a lot of small business owners are skeptical of larger companies and want to make sure their interests are represented in any deal that gets struck. host: president obama in michigan said i will compromise a little bit, but when it comes to rising -- raising taxes on high-income earners, i will not. how do your members look at that? guest: we go back to simpson- bowles. it assumed that the tax cuts on the top 2% would expire. it would substantially eliminate deductions. they would get rid of the charitable tax deduction. those are all very painful steps, politically difficult, but they could have a significant impact on the debt. the president's approach -- let's take a step back.
what we have tried to do is offer business leaders two things -- and the first is an apples-to-apples comparison. we the president put the february budget, and chairman paul ryan's march but -- budget proposal. rather than allow each party to come up with their assumptions, we took the simpson-bowles assumptions and applied them to both plans. we tried to apply a simpson- bowles-centered approach to the problem. when you compare the obama plan and the rise in budget plan, the obama plan is closer to simpson- bowles in terms of spreading the pain, protecting the most vulnerable and increasing revenue than the paul ryan plan is. apples-to-apples, simpson- bowles would increase tax revenue by about 4%, and the
obama plan by about 3%, but the difference is the obama plan allows so -- allows for rates to rise. business leaders understand the need for more revenue. fix the dead -- when the key principles is more revenue -- , one of the key principles is more revenue. whether this support letting rates rise, or the simpson- bowles planned in getting -- and in giving away tax expenditures, it depends on the nature of their business, but they generally agree that they need new revenue and it needs to be offset with income reforms and that we need to get going. we cannot make it harder for ourselves by going over the cliff.
host: spending needs to be on the table? guest: s, and i go back to simpson-bowles. if you look at the february budget presented by the president, and the march plan presented by chairman brian, the big driver of the difference is defense spending. when business leaders come to washington, they're more likely to defer to washington and defense issues and are much more skeptical about discretionary spending. using the numbers from a dealer and much -- march, they are about 25% less than simpson- bowles. host: new york. are you a business owner? caller: i am. i run a business for 20 years. i wanted to mention a
distinction i heard upon them talk about the other day concerning medicare. medicare is a government expenditure, but it does not drive the expense of health care. it is the health-care providers the drive the expense. it is a simple distinction, but i'm not sure that your viewers are aware of it. host: jim doyle, do you have thoughts on that? guest: it is interesting. a lot of people think the big driver for raising taxes is to make the buildings bigger, the bureaucracies bigger, but if you look at the cost-drivers it is the increasing cost of health care services in the changes of any team population. what we see when we talk to business leaders, particularly in markets along the border with canada or in the mexico --
market, the sea rising health- care costs as a competitive disadvantage. we saw a lot of small builders losing business to canada almost exclusively on health care cost. it is understandable that small- business owners are concerned about the aca and how well it will be implemented, but business leaders keep reminding us that their cost keeps on going up, and it is eating into employee salaries, effecting their ability to get the best talent in keep it, and affecting decisions about making people full-time hires. the business leaders we care about -- from the most are those focused on the long-term trends and understand we need to do something because the current health care situation works least well for small businesses. host: bob.
minnesota. independent caller. caller: by an independent. i'm retired, and i am quite old, old enough to see that -- everyone that i know with -- i know has been involved in business. sometimes you are a worker, sometimes a private contractor. anybody that earns money is a business. we hire phone companies, garbage collectors, we have roads repaired. we are all business people. i am not sure why we think certain businesses are more privileged and deserve special favor from washington. -been retired long enough. every year i worked extra jobs and christmas, and in 1998 i
worked at a big box store and they paid me $13 an hour. in 2007, they paid me $8 an hour. host: from twitter, how to determine which business leaders to speak to the administration? guest: we will answer bob put the question first. you make the point that a lot of people are in business one way or the other. there is a larger trend in smaller businesses, and people starting businesses from their own home. about 5000 new businesses are generated each year. we've seen through the recession is that those new companies have just not been created, and a lot of smaller companies were disproportionately effected by the recession. texas to capital, consumer demand -- access to capital, consumer demand -- this has had
small businesses harder. we are focused on small business because there are more of them and they are critical to increase in jobs, but also because technology has gotten to the point where it is easier for businesses to get involved even if they do not have the washington office or a lobbyist. if you look at social media, or grass-roots campaigns to help members with tough votes, there are tools emerging that allow business leaders that have day jobs to get involved in meaningful way and we are working with them to let them use those tools. with regards to how people get invited, it varies from city-to- city, and we tend to recruit with the help of our founding members. if we are in san diego, and early-supporter and a founder has hosted briefings for us.
if you will do something on stem education, qualified members help us identify companies from understanding of their home markets. we work with local chambers, members of congress, and we have developed a network of convenience, local business leaders better interested in participating and know how to recruit people. so far we are brought more than two thousand people to the white house this year alone representing more than 500 towns and cities, probably around 1800 companies. out of 10 our ceo's. two out of 10 are investors. host: scott. georgia. republican. caller: i may health insurance
broker and i have a couple of the employees and a comment on the aca. i agree and something had to be done on health care costs, but this will just add fuel to the fire. part of the provisions that have yet to come into effect, one of which requires the highest ratio from three-to-one, that is your lowest rate cannot be any higher than three times your lowest rate. so, if you have a 64-year-old and a 19-year-old, you can not charge the real cost because the risk factors for a 19-year-old are different. that is why insurance underwriters have done it that way. those costs come out in other parts of the economy in one way or another and it surprises me
the way the law was put together, and they did not just use common sense. they go to schools that i would not be allowed into. guest: a couple of points raised. it is a big problem for small businesses. if they have one person with extremely high health-care costs, affect the more. again, small businesses are paying approximately 25% more. the old system does not serve small businesses as well and the economy is increasingly dependent on small business. there is also the problem portability. i think the caller would see that as a major challenge for employers and people deciding whether to take a new job or switch jobs. so, i think a lot of the
challenges of the aca are trying to balance the challenge of bringing market forces to bear and, with solutions that create plans to work with small businesses. one of the reasons they kept their ranges to make it easier for small businesses to afford it. host: jim doyle, business forward, thank you. next, we will take a closer look at domestic spending with charles clark, and then later on two different perspectives on the domestic spending, but first a news update from c-span radio. >> the obama administration is moving closer to recognizing the new syrian opposition council as the sole legitimate representative of the syrian people. it is the latest step in diplomacy that officials hope will end syrian president bashar
al-assad regime. it will pave the way for those looking to oust bashar al-assad. secretary of state clinton had been due to attend the meeting had to cancel her trip due to illness. her deputy william burns will leave the u.s. delegation. an international study done every four years say asian students lead the way while u.s. students still do better globally. fourth graders have to improve their scores in reading and math, but progress seems to fall off by eighth grade where math and science scores are stagnant. a new law took effect in colorado. there were no crowds and little fanfare as the state became the second to legalize marijuana. a handful of activists led up on
the capitol steps, and the governor shared his approval in an announcement on twitter and in an e-mail. those of the latest headlines on c-span radio. >> punch me, strength and me. take things from me. sit on me. >> did it to him hard to >> he is not safe from the autobus. >> i have been done that autobus. they are as good as gold. >> all of us in this country are starting to see people talk about their experience of this phenomenon that so many of us have experienced in one way or another and have no words for other than adolescents were growing up. people are finally starting to say this is not a normal part of growing up, this is not a normal right of passage. i think there was a moment where there is a possibility for change, and the director and i decided to start the film out of
that feeling that voices were bubbling up, coming up to the surface to say about this is not something we can accept any more as a normal part of our culture. >> filmmaker cynthia lowen has followed up her film by getting stories together in "bully." sunday, on "after words." >> "washington journal" continues. host: we have been breaking apart the fiscal cliff talks, looking a different policy aspects of the negotiations and today we focus on domestic spending. charles clark, senior correspondent with government executive me -- media group is here. sequestration, if it happens, we talk about automatic spending cuts, but what is sequestration?
they usedthe 1980's, to talk about the vegomatic, a late-night advertisement that did the cutting for you. in 2011, congress had a super committee that was supposed to determine the cuts and they failed. the backup plan was something nobody wanted, but it was supposed to put fear into everyone, and that was across- the-board cuts of about $500 billion over 10 years. host: in domestic spending? guest: yes, and another $500 billion in national security- related spending. host: in 2013, we're talking about a total of $109 billion in cuts. discretionary spending makes up
about $38 billion. non-defense mandatory makes up about $17 billion. can you explain the difference? guest: mandatory has to do with entitlement programs that beneficiaries are permitted to receive by law, and discretionary spending is where congress has an annual appropriation and has more flexibility year-to-ear on what to cut and what to raise. host: if the cut happens, let's begin with what is not on the table. what is exempted from sequestration when it comes to discretionary spending? guest: military pay, veterans' benefits, a lot of what would be called social welfare programs, like food stamps, or the snap. a social security, medicare is
exempt. there are also federal salaries that cannot be effected. host: there are a lot of cuts that would go through it sequestration happens, but what are some of the big ones that people would notice? guest: in october, a ranking member of the house committee had detailed projections. remember, agencies have been prohibited from acting them out in detail, so a lot of projections come from congress and interest groups. this house appropriations letter details above 24,000 jobs. talk about 3000 fbi employees. it talked about a head start programs -- 100,000 fewer
children been involved -- and rolled. it took about women's health programs. about 45,000 low-income women would heard that, and a nutrition program, about 900,000 would lose out, and about 16,000 fewer teachers. host: here are some others from bloomberg news -- national institutes of health, to $0.5 billion.
after the been gauzy thing, that could be cut. -- libya thing, that could be cut. guest: they're trying to put some of the embassy money back, i just read. i have heard that the sequestration cuts would be the equivalent of shutting down parks. that would be something people would notice. host: both sides are trying to come up with a compromise. with the republicans want to do? -- what do the republicans want to do? guest: they have more emphasis on spending cuts, in john boehner has come up with a $2 trillion planned over 10 years, and offered $800 billion in revenue he would like to get from tax reform, broadening the
base, and removing some of the tax deductions without raising the income tax rates on higher income tax all -- taxpayers. president obama has not offered a specific plan for spending cuts. he has offered economic stimulus for job creation, but he has offered about $400 billion in medicare cuts as a starting point. president obama seems to be going to the mat on raising the top tax brackets for houses burning $250,000 or more, and this is what the republicans for political and historical reasons have had the most trouble. host: house republicans, according to "usa today," --
guest: the best indicator of that would be the budget passed by the house by paul ryan, and it includes budget category cuts lead in transportation, or social services for income security. it does not get to the specific program-level, but he is talking about a 26% cut in transportation, which analysts have extrapolated and could mean a huge cuts in the number of air-traffic controllers, for example which would cause flight delays and cancellations. they would have to get more specific later on. that is the general framework. host: how much does domestic spending consume of our federal government? guest: well, if they cut $38
billion, we have a $3.5 trillion annual budget, and a thoughtful approach is about $1.2 trillion. this small compared with social sector, medicare and medicaid spending. host: the center on budget and policy priorities the 13% number, is that we are talking about when we talk about domestic cuts? guest: some of this is subject to the horse trading in congress, and the senate
conferences between appropriations committee that have to do some logrolling to make things happen, but that is where they have the most impact. host: let me go back to this pie chart and there is another component. program areas -- that is a breakdown of the federal budget. we are talking about domestic spending and what is on the table in the so-called fiscal cliff talks. charles clark is our guest. the me show you what president
obama had to say yesterday in michigan. where he is on the tax rates. [video clip] when you put it all together, if you need a package that kids taxes where they are for middle- class families -- that keeps taxes where they are for middle- class families, make some cuts some things we do not need, and then asked wealthier americans to pay a slightly higher tax rate. that is a principle but i will not compromise on because i will not have a situation where the wealthiest among us, including folks like me get to keep our tax rates, and then we are asking students to pay higher student loans, were suddenly, a school does not have school books because the school district cannot afford it, or some family with a disabled kid is not getting the help they need through medicaid. host: here is how the speaker's
office responded yesterday -- host: amy. indiana. you are up first. caller: good morning, mr. clark. 019 look at the spending and how it has increased in the path -- when i look at the spending and how it has increased in the last four years -- under president bush, the annual budget was $2.5 trillion a year and under mr. obama it has gone up to $3.5 trillion a year. it sequestration went into effect with the spending cuts, would it take us back to the bush-level? during the bush-level, all of
the parks were opened, that teachers had plenty of books, there were plenty of border control and the fbi security, and all the things were going along just great. so, these sequestration cuts, do they take us back to the bush- level, where do they take us back to something like the eisenhower-level, where we really did not have a lot of those modern federal bureaucracies? guest: the government grows a little bit by inertia as population grows and people demand more services, but also during the bush era, a lot more was borrowed. the war in afghanistan and the war in iraq were put on a separate budget, and no revenues were raised for that. the 2001 and 2003 tax cuts
created some jobs, but also drove the deficit up a little bit. it is true that president obama has added another third to the national debt, and some of that is his priorities such as the health care law, and some of that is also because of the recession in the stimulus package. that was considered emergency spending. there have been deficit reductions in the past couple of years, and this is one of the bones of contention in the fiscal cliff talks -- whether to count about $1.5 trillion that were signed into law in the last year in the budget control act because the republicans would like to start with a baseline of new cuts, and the obama people would say they have already given time to raise revenue.
host: of the white house proposal on domestic spending -- 1-year deferral of sequestration and a multi-share stimulus package. from twitter, what do you consider domestic spending? is spending and the structure spending or investment in our future? guest: i would call it spending in the short term. in the long term, it creates jobs, and it avoids safety expenses, such as when the bridge collapse in minnesota 3 or four years ago. that is the thing about government programs. if you plan reductions, it seems to be more cost-effective. there is more certainty in the projection of when the budget will shrink, but when it is started, there can be arbitrary cuts in some of that can be wasteful. host: ruby.
north carolina. democratic caller. caller: yes, i have a question. unemployment, the extension is set to expire on december 29. what is the likelihood of that been extended? guest: that is a good question. we have headed for two years. republicans tend to be skeptical because there is a feeling that it discourages people from accepting jobs that are less desirable than the ones they hope for. the democrats would argue that it puts spending money in people's pockets, which helps the economy and the unemployment weekly payment is not enough to make anyone comfortable and lazy, but it does cost money. so, that is one of the many things in the fiscal cliff discussions that we also have to deal with.
the social security payroll tax holiday that we have had for two years -- they have to decide whether to extend that by december 31, and there is also the issue of the alternative minimum tax, which is designed to make sure that everybody pays something in income tax, especially among the wealthy who might use deductions to bring their tax payments down to zero. the problem is the alternative minimum tax has been affecting more and more middle-class people, and the irs in particular is eager for congress to take a stand on patching up the minimum tax by december 31 because mostly they have to program their computers. host: the amt was part of our series on the different aspects
of the fiscal cliff talks. you can go to our web site to find more details. today, the discussion is about domestic spending. if sequestration happens at the end of the month, and we are talking about $500 billion in domestic spending across the board, right, charles clark? guest: $500 billion over 10 years. $38 billion would be in 2013. host: when people say across-the board, automatic, what does that mean? guest: agencies have these accounts, and there are about 1200 of them, and the managers have not been permitted by the obama-care administration to map out exactly how and 8.2% cut, which is about the equivalent of a 12% cut because the fiscal year is about one-quarter old by the time they kick in, so it is
more abrupt than people think. these program project activity accounts, each would have to be cut by 8.2%, and only last week did the obama administration give permission to the pentagon and other agencies to start publicly discussing and calculating exactly how many people, programs and services might have to be current. host: right wing on twitter -- "how much of the federal budget increased over the last 10 years?" guest: 10 years -- the budget is $3.5 billion now. i think it is one-third higher than it was that during the bush administration, but i would have to go back to the clinton era. i would have to look that up. host: from twitter, c-dog wants to know what percentage of
welfare and snap make up the budget? 13% of safety net programs -- is sitting at programs. the virginia. michael. caller: first, i want to say hello to mr. clarke, you and everybody at "washington journal." i have a question. why can't congress and senate to pass a bill to make horse -- called the u.s. enterprise course, put it on the track, let it run, take the money, put it into a fund and make a united
states lottery. host: i am not sure where you are going with that. surely. texas. republican caller. caller: everything that is wrong with this country can go right back to congress because of their foolishness. here in west texas, we have built a $100 million high-speed, high-tech bridge into mexico. mexico was supposed to finish the bridge on their side. we finished our part on this side, and even added an extra $10 billion in the last few months to build a big kiosk, and mexico has remade the unbuilding their side of the bridge because it is driving into the heart of a cartel-country, southeast of el paso.
here is $110 billion for this stupid bridge into mexico, in the most remote part of texas. it will never be used by americans, and mexico have said they deemed it too dangerous, driving right into the heart of cartel country. it is stuff like that that goes on and on, and you could do that with every congress. host: charles clark, thoughts on that? guest: the war on drugs is nowhere near as successful as anybody hoped it would be, and a lot of money that has been spent on it, people feel it has not produced results, but i suppose they have to keep trying, and i would say the same thing about border protection. they have abandoned the plan for
the electronic fence across the border, but they have reduced the number of illegal crossings, so there is progress there. host: in our list of examples of cuts that could happen under sequestration, customs and border control looking at some of the $12 million less to spend. -- looking at $712 million less to spend. they're trying to come to a grand bargain deal to avoid these cuts and, with a bigger deal. on that point, we have been tracking all of this, the events in washington, news conferences, the twitter feed from reporters. go to our web site, c-span.org fiscalcliff.
"the baltimore sun" this morning -- for his part, john boehner -- host: georgia. democratic caller. what do you think? caller: i think the first issue we should look at is revenue. the other states have not developed enough revenue because of our import taxes are so much smaller than those of countries
like china. and in turn today -- 8 report was done on comparative tax, and they support 20% of their federal government through import taxes. why is it that we feel we cannot compete with a country that is taxing us heavily on our imports, yet when they export to our country we have just 1.9% next that is ridiculous. it is not a level playing field -- 1.9%? that is ridiculous. that is not a level playing field. an in tern in indiana did this research.
guest: there's a risk of a violation of the world trade organization pact. a lot of the big box stores rely on inexpensive imports. so it would be a trade-off. it would have an impact on the prices. host: winchester, ohio. thomas is an independent. caller: thanks for taking my call. i watch c-span all the time. i'm curious why this continuation of the republican versus democrat bashing goes on when there is such an important issue that needs to be taken care of in this country. why is there not a federal sales tax to take care of some of this debt that we have increased needlessly, in many respects? it's just like the lottery and when it first came out, to finance the school system. they get a bunch of money and
the next thing you know it is all going to administrative costs, 80 percent of it. why does more money not go to where it was originally designated? guest: a couple years ago there was talk about considering the european style, value added tax where items are taxed at each stage from manufacturing to wholesale to retail. it seems relatively painless, but one of the reasons the republicans don't want that is because it is almost too painless. they feel it would be, an atm machine for the government. they think they could keep track of tax better without a value added tax. many tax experts think it's a good idea. host: laura, republican caller from lansing, michigan. caller: yes, all these
deductions and cuts and things, i have never seen anything done to ceo pay, which is exorbitant. i think possibly we could recuperates a money if we took a minuscule amount from wall street, a half cent for trade or something. i liked the two person discussion you had yesterday, reminded me of c-span of old. i would like to see legislators get paid for the hours they work, nor for they are there for a couple days and then they are gone and then they go talk to their constituents and they'll come back with a sun tan. so we know their constituents are all in florida. guest: with ceo pay, years ago there was a tax on any salary
over $1 million. that was abolished in the george bush era. there is a new say on pay provision in the dodd-frank financial reform law that gives shareholders a little more veto power over the ceo's pay package. there's not much congress can do on that is directly because if the private sector. the tax on stock trades, there's a proposal for that. this has been tried in other countries. ralph nader just offered a detailed plan for that. host: when you look at sequestration and automatic spending cuts for domestic spending, $500 billion over 10 years, how deep a cut is that in domestic spending compared to years passed when spending cuts -- on spending cuts or other negotiations? guest: it would be endorsed cuts historical with the possible exception of right after gramm-
rudman in the late-1980s there may have been some cuts around 8% or 9%. one thing i should point out is parts of the budget that are protected from sequestration would still suffer because if furloughs andreclose reduction of force, it is scary. host: federal workers, what happens to them under sequestration? guest: in the budget negotiations, the current federal pay freeze is a big bone of contention the republicans would like to continue. they would like to require federal employees to pay a bigger share into their retirement plans. but an individual souring cannot
be in docked under sequestration -- an individual's salary. many interest groups are very wary of sequestration and warning against it and have made the case they have already contributed $100 billion over 10 years in pay freeze and pay cuts. host: charlie clark is a senior executive with government executive media. now, a call from illinois. caller: i wanted to ask if -- it does not sound like the numbers of all the cuts over the next 10 years is anywhere near what the high cost of it going up even more trillions, whether we are at war or not. it just seems like such a little amount of money over 10 years versus the amount of money that is going to be rising just
because or world costs and costs in general. it's not going to put very much evident in the problem. guest: you are right. their $16 trillion in public debt. on the other hand we have had a public debt for much of our history. if the economy is growing and the debt is on a downward trajectory and people can live ish that, i'd think the idea to, with about $4 trillion over the next 10 years and make a down payment on its and then hope that the economy starts scoring and quarterly growth stepped up to 5% and then you bring in a lot more revenue. -- hope that the economy starts roaring. host: david is an independent caller from montana. caller: there never really have been any cuts. there have been some reductions in increases. the situation we are in,
president bush, as the politicians were talking, they said you drove this thing into the ditch and increased our debts and so forth. president obama took that vehicle and drove it off the cliff. we talk about the clip that we are going to go over. we are already over that cliff. what we need to do is somehow climb back up out of it. the way it's looking, the way they have this government split up now, i don't think they will ever do it, because's policy is divided and conquered. you cannot do it that way. -- because obama's policy is conquer.d guest: i think there will be pressure for years to come to keep spending down. host: on twitter --
guest: there are laws. they require agencies to spend only within the program parameters that they are authorized by congress. it's also true that congress has never been able to submit a balanced budget because there's a reluctance for political reasons to raise taxes and a lot of these spending programs are popular, which is why the term of "waste, fraud, and abuse" is popular, because it sounds like there are many expensive items everybody would agree are wasteful and why don't we just eliminate them? but when it comes to them, they are somebody's baby. host: the ranking democrat in the house appropriations
committee outlined these cuts. all the different programs, the domestic cuts. what happens to the appropriators in the process? guest: they are nowhere near as powerful as they used to be back in the days of lyndon johnson with the appropriators could get dams built or not in someone's district and it was done behind closed doors. host: what are the appropriators? guest: the congressional budget process was updated in 1974 and task of annual spending bills organized by topic. the authorizing committees, which are all the other committees in congress deal with subject matter and details and how a program should operate, and then they nominate an a proximate spending levels. the and the appropriators have to come and rejigger all that. it's why they're so popular and get lobbied by other members of congress to keep spending up in certain areas in the region.
because of the political splits, congress has had continuing which isns they don't have a budget agreement by a deadline and then they have to reauthorize everything for certain levels for the next year. which is what happened during these fiscal cliff discussions. in september, congress agreed the government would be funded through march 27 of 2013, up to current levels, which, thankfully, at least that was taken off the table, that the government would shut down. host: what does it mean for earmarks? are they relevant anymore? guest: they are still done, but under different names. during the political campaign it was pointed out that congressman paul ryan had responded to a couple constituents' requests for grant funding in his home district as part of the stimulus
package that paul ryan had voted against. they did pass resolutions banning your marks. so there does less flagrant. host: sandy, a republican caller in virginia. thanks for waiting. hello? p in long island city, new york, independent. -- pete. caller: my opinion is, i believe the president actually wants to go off the cliff. i really do. i think he really wants to tax the rich no matter if the derickson pour or not and before we cut any social programs in this country we should stop giving aid to countries that hate us. -- he wants to tax the original matter if it hurts the poor.
guest: senator patty murray says going off the cliff might be preferable to signing a bad deal. i think president obama felt a little burned from the 2011 budget talks with john boehner, so he is driving a harder line, having won reelection. the idea of letting the tax rate on the top 2% go up is not really a surprise. i think everybody agrees that he campaigned on that. there are millions of people who voted for him that are expecting that to happen. host: the style section of the washington post has a piece about the director of legislative affairs at the white house, rob neighbors. what is his job? guest: behind closed doors, the staff members have a lot more
influence because some of the budget issues are so minuscule and then the legislative issues have to be drafted in legislative language. when there are no cameras or microphones, the negotiators are really talking turkey about what concessions can you live with and how can i sell this to my based? he has to be an honest broker and he has to keep lwaks forget -- leaks from getting in the press or no one would trust him. he does not let things get in the press the next day. host: he has to go to the white house and say this is what they are saying, this is what they can deal with. guest: yes. in the past when the negotiations happened in 1990, it comes down to a few people in a room. this is not considered
democratic by many rank-and- file. year from an independent senator sanders in vermont saying we have our own ideas but when we are up against a deadline and the clock is ticking, it often boils down to sometimes a group of eight, as in what happened in 1990. sometimes it might just be president obama and john boehner. host: that's what we have now. now, bernie, a democratic caller. caller: i receive disability, social security disability. i was wondering how much of a cut would they be taking? i really depends on it. guest: i don't think it would be cut under sequestration. in the long term there is and what might come out of this budget deal is a commission to review social security. it is true that social security disability program has a backlog of reviews by an administrative
judge is right now. so there's a little concerned that some undeserving people are getting the payments. so that is something that will be examined over the next couple years. i don't think your benefits will be cut next year due to sequestration. host: tomorrow we will focus on social security and some different proposals for addressing that and the overall fiscal cliff tops. another tweet -- is that possible? guest: congress always waits till the last minute and they often kick the can down the road. but for the last couple years everything was waiting for the next election. now the election has come and gone. so you see some movement on the republican side. their real goal is entitlement reform. maybe if we get this tax rate controversy out of the way, then
there can be a real grand bargain that both parties could take to their voters with some stake in host: it charlie parker, thank you. guest: guy to be here. host: the conversation continues, what should be saved and what should be unspent? two different perspectives coming up on that. first, c-span radio. >> u.s. trade deficit increased in october because exports fell by a larger margin than imports. that's assigns lower global growth could weigh on the u.s. economy. the commerce department says the trade deficit grew 4.8% in october from september to $42.2 billion. more on the economy from the federal reserve. an announcement is expected this week on a new bond buying plants that may soften the blow from tax increases and spending cuts that will occur in january if congress cannot reach a budget deal. president obama continues to insist that the gop endorsed
higher tax rates for wealthy americans while house speaker john boehner says he's waiting for president obama to identify the spending cuts he's willing to make. in business news, delta airlines is purchasing a 49% stake in british airline virgin atlantic at a cost of $360 million. delta is trying to boost its share of new york to london market. but airlines would share money from the flights operated under the partnership. those are some of the latest debt lines on c-span radio. [video clip] >> give it to him hard. >> he is not safe on the bus. >> i've been on the bus. they are just as good as gold. >> all of us in this country are starting to see people coming out and talking about their experience of this phenomenon that so many of us have experienced in one way or another and had had no words
for, other than adolescents, other than growing up. people are finally starting to stand back and say this is not actually a normal part of growing up. this is not a normal right of passage. i think there was a moment where there was a possibility for change. the director and buy it decided to start the film out of that feeling that voices were bubbling up, coming up to the surface to say this is not something we can accept any more as a normal part of our culture. >> the filmmaker has followed up her award winning snowmageddon essays and personal stories together. more saturday night at 10:00 on c-span2. and find morel on line findike . like us on facebook. >> "washington journal" continues. . host: domestic cuts on the table
for the fiscal cliff tops. isabel sawhill, senior fellow with the brookings institution and co-director of the center on children and families. james capretta, ethics and public policy center fell and visiting scholar at aei. are these potential domestic cuts under sequestration devastating or manageable? guest: somewhere in between. not a good idea. they would be very deep cuts. an 8% cut across the board is a very significant one time cut for any program to sustain in the immediate year. so they're not a good idea. would it be the end of the world? no. there would be a downsizing of a lot of services across the government in terms of the domestic accounts. there would be fewer services being provided. there would be reduced federal employees. some grant programs that would take carand hair cut of 5% or 1.
the economy would go on and the government would go on. the public would still continue to get serviced by and large. host: can agencies manage this? guest: we have managed sequesters in the past, but not of this size. this would be the biggest one of my knowledge we have had, a onetime cut across the board like this. i am against allowing the sequestered to occur. we should be trying to make cuts in programs that are rational. host: there should be spending cuts, but they should be well thought out? guest: >> absolutely. host: if sequestration happens, do you think it's devastating? guest: i pretty much agree with what jim said. it's about an 8% cut. that's pretty deep, serious stuff. it is done in a bad way across the board and not picking better programs versus the worst ones
and choosing wisely. the other thing i would add is it is on top of some cuts we have already enacted. i don't think a lot of people understand that as part of the budget control act, a law that was passed in 2011, part of the debt ceiling crisis of that year, we already cut spending across the board, discretionary spending, by 7%. so when you add the new cuts on top of the ones that already been enacted, the total cut is more like 15%. that gets to be quite devastating. host: jim said these are manageable. the economy goes on. agencies to figure things out. guest: is it half empty or half full? it is not like 9/11 or hurricane sandy or nuclear weapons in iran.
it is very serious stuff. if the worst thing about it is so indiscriminate, so poorly done. it was never intended to be a way to cut spending. it was intended to be an enforcement mechanism, a disciplinary measure on the congress and the white house to make sure they got something done before 2013 began. everybody thought, with this doomsday scenario in front of them, they will surely enact a budget deal. i think they're probably still will. but that was the purpose. the purpose was not just to cut government spending. host: let's look at some of the examples of programs that will get cut. the national institutes of health. the fbi. what do you make of those numbers? guest: those are pretty big numbers.
absolute numbers don't mean a lot to people. when we talk about millions and billions and jim and i both serves in -- served in government and we know what happens when you have to deal with members of that size. when you tell people it's about an 8% cut or 15% if you talk about what is already occurred, that gives them a better sense. it's going to be on everything. whatever program is, it is going to be reduced. whether it is money for the nih, which does research on cancer and alzheimer's and diabetes and other chronic diseases, they will be doing less research. if it is the fbi or the border patrol people, there will be less law enforcement. there's going to be less money for housing assistance and for child care and for slots in headstart. will be fewer teachers. a lot of things would happen. host: should there be any
further cuts? guest: absolute. i believe that we have to have -- we have enormous deficits going forward. what we need is a balance of spending cuts and revenue increases. given that we have already had some spending cuts, i agree with the administration's focus on let's do something on the revenue side now. going forward, the big items in the budget, the ones that are causing the problem, are not these little programs that are threatened right now. they are the big programs like medicare and social security. host: sticking domestic spending, should there be any more cuts? guest: i would never say there should never be any more cuts. but if there are going to be more, they should be carefully chosen. this article were part of the budget is only about 18% of the total, it has already taken a big hit.
it is a part of the budget where we have invested research, where we invest in education and infrastructure. so i don't think that's the best place to cut. host: let's stay with domestic spending cuts. education, what would be the impact of sequestration? guest: most education spending is paid for by state and local governments. but the part that is paid for by the federal government would be cut very hard. so there would be the need, because of less grants and aid from the federal government to the states, there would be less money for teachers and especially schools serving less advantaged students. there would be less money for special education, for kids with handicaps or disabilities, there would be less money for a variety of things of that sort. host: jim, i know that you think
accounts are too deep, but where can you cut when it comes to education -- cuts are too dep? guest: i said that they are indiscriminate prepares a lot of room to cut the budget. there's been relatively modest cuts already, but that was off a very high base. it's been a very large run-up in this portion of the budget over the last 12 years. between 2000 and 2003 the real increase in spending and domestic appropriations has gone up 40%, so there's been a steady rise, that's including education, health care, infrastructure, across-the- board. these programs have all been elevated in their size, so there's room to retrench a little without doing a lot of damage. in the education space, the programs indicated are the federal programs in addition to what state and local governments
do, there's no evidence that much of the spending has had any positive impact on educational achievement of the state and local level. so we've been doing this now 30 or 40 years. lots of studies have shown federal money is largely irrelevant in terms of educational achievement. and it's also very small portion of the total educational budget. and it has been increased substantially and the federal level. confusing political accountability. education is an incredibly important issue, but must be and all at the state and local government level. if the federal government pulls back on spending, it would help the school systems if there was much more political accountability where they have to decide, it will invest in the schools. host: on public safety, how could things be cut? guest: public safety has a very important role. the border patrol and the fbi and the department of justice at the federal level.
most crime-fighting is done at the state and local level and not the federal. however, i don't think there's that much room for cutting in that portion of the budget. like anything else, there's some room for consolidation, for some overhead removal. if i were to cut in this area, i would focus on things like reducing the size of the work force. i would be looking at consolidating programs that are duplicative. gao has done a number of programs on many areas including the administration of justice. i would look at low performing programs. there have been a number of evaluation of programs that ask whether there actually retrieving -- actually achieving the results? many studies have been done that show some programs don't actually do ianything in terms of delivering public service. i would focus on those areas. some deep cuts could be made there. host: senator tom coburn had a report the sponsor that was written up in the papers last week about homeland security
grants, that it has ballooned since the 9/11 attacks. if you're looking at city that have made up and plausible scenarios for terrorist attacks. room to cut? guest: i think so. i'm not an expert in common security, but i am familiar with it. i agree with the federal government starts giving out grants like this, there's lots of room for abuse and made rules and made up responsibilities just try to get federal money. that probably has taken place to some extent in that area. i would take a hard look. host: your thoughts? guest: no one can disagree with the idea that we ought to make sure that the government has well-performing programs. i would give the current administration pretty high marks on worrying about that. they have a whole program in place to evaluate programs and where the evidence suggests they are not working, they are trying to a cutback or reform the
programs. let me give you an example. the head start program, very popular program that uses federal money to serve 3-year- old and four-year-old kids from poor families to help them get ready for school. early touted education of that sort has long been a fairly effective way to help kids succeed however the current head start program is not always operating up to snuff. some evaluations of shown there are enough head start centers that are not doing well that they really need to be closed or the money to be redistributed. the administration is doing that now. i think what jim is saying is it is the indiscriminate nature of these cuts that is wrong. i might disagree with him a little on this notion that we are spending too much money on this part of the federal government.
if you look at the proportion of money that we are devoted to these programs as a proportion of gdp, of the size of our economy, taking into account population growth and everything else that has happened over the years, and they're headed toward their lowest record level. this is not the way to grow strong nation, by cutting education and research and infrastructure. host: we are talking about domestic spending cuts, what could be on the table if sequestration happens. and the debate sides are trying to come to a deal to avoid the cuts. any deal would contain cut domestic spending as well. so that means education, public safety, public welfare and is on the table and possibly help care. federal government, research, parks, etc.. springfield, an independent caller. the go-ahead, george. caller: would you explain to an
illiterate individual like myself what baseline budgeting is? and then the second part of my question is how can whatever% increase in spending money available to a department be considered a cut? guest: baseline budgeting means the congressional budget office and the office of management and budget, the agency that calculate the budget projection, they do an estimate of what the budget will look like next year and they assume a in that the current offer programs that are automatically grown, things like social security and medicare, and from the domestic accounts they assume they will grow with inflation. so they assume an automatic increase of roughly 2% to % will occur in order to keep the programs in line with inflation. then they measure a cut against
that inflated baseline. they say if you get below that level, then you are making a real cut in the program. for instance, if a program was going to grow under the baseline by 3% and instead it goes by only 2%, that is considered a cut. a lot of americans would say that it still grew by 2%. but the way washington sees things, it's true that is seen as a cut. host: on twitter -- guest: i think that's not true. if you look in the history, between 1989 and 2008, the domestic accounts or percentage of our total ttp with 3.6% on average for the two decades -- of our total gdp. large increases in spending occurred in 2009 and 2010.
obama came into office and increase to this portion of the budget substantially, 24% over two years. there's been a very major run-up in these programs. you can do retrenchment back to the 2008 levels without doing any damage. the run-up that and jim just alluded to was due to the recovery act. in other words, because we were in a recession and re-enacted a stimulus plan some of these programs were pumped up. but that is temporary and most of that will go away, partly because the recovery act will expire and partly because we have already had some cuts would take the form of putting hard caps on how much congress can appropriate to this part of the budget. those hard caps will fight over the next decade. those are things that have already been enacted. so i agree with the caller said we have done a lot of cutting in this part of the budget already
there that does not mean we don't need spending cuts elsewhere. i but i think this is the wrong place to do them. host: on twitter -- guest: there's some truth to that. as i said before, the drivers of our deficits into the future are social security, medicare, medicaid. these are 40% of the budget or more right now. and are growing rapidly. that's partly because the elderly population is growing and partly because health care costs per person are going up very rapidly. so the public wants less medicare, less social security, less medicaid, which pays for nursing-home care, as well as for health care to low-income families, fine. and we are going to need to go there. but we cannot continue to
squeeze money out of the small part of the budget that is called domestic discretionary programs. host: we are talking safety net programs, which make up 13% of the overall budget. then the other portion of that pie is 7% of that portion is benefits for federal retirees investments. the% for transportation infrastructure. -- 3%. raymond in michigan, democratic caller. caller: i have a two-part question. i was wondering, i am going to be retiring in another 12 years. but i am not going to have social security until probably the age of 70. i am now 50. i was wondering, if i was to lose my job right now for some
unforeseen reason, i will my benefits. i have the option to keep my benefits at about $800 cost. when senators and congressmen step out of their position, if i'm not mistaken, they still have their insurance for life. the second part of my question is i believe they will get a 3% pay raise every year. i've never seen in my lifetime them stop that. i was wondering if that is something that could be done? guest: i see what you are talking about here that if you were to lose your job, you would lose your benefits. you in-person early your health care benefits. that's right. you would lose them. under the affordable care act, once it is implemented in 2014, that would enable you to go on an exchange to buy a group plan. if your income was low, you also
get a subsidy from the government to buy that, up to moderate income level. on the point about pay raises, you may be interested to know there's actually been a bill introduced in the congress that says no budget/no pay. it says if congress cannot get its act together to fix this budget problem, but they should not get paid. that bill has not been enacted, not surprisingly. but it's interesting that at least there's been a group in congress willing to put that legislation forward in response to your and many others comments. host: a tweet -- guest: we need to restrain spending at the federal level. there was an interesting study recently that showed if you look at the productivity of the
federal workforce, i've been a federal worker much of my career. i admire the federal workforce. many things are being done well. but we need to get even more out of our federal workforce just like me to get more out of the private sector. as part of making the federal government more efficient, we will have to look at downsizing the size of the federal workforce. that does not mean it's bad. it contains the federal deficit is reduced and that frees up more room for the private economy to be optimized. you cannot say the federal government needs to prop up employment at the federal and state level. host: brenda, fort worth, texas, independent. caller: a couple statements. regarding the congress expenditures on themselves and their money, money magazine in the 1990's did an article about that we're at that time they
went to operating on $2 billion or $3 billion. for your congressman, all they did was work to get reelected -- four congressman. and similar uses for our tax dollars. , federalcurity employees get bonuses. this has been going on 40 years. i don't understand. if they are getting an hourly salary and so forth, why should they get bonuses? guest: i think bonuses are not such a bad idea. the private sector uses bonuses to give an incentive to people to perform better. you don't necessarily get a bonus automatically. you get a bonus if you have done something to improve service or have been a very highly productive employee.
pointingy, it's worth out the back to the social security administrative system would be affected by this sequestered. not the check that goes out to retired citizens but the administrative expenses in the social security system. which are quite low considering the big job they have. but there would be its slower processing of initial applications, there would be slower processing or claims for disability insurance. i think we would not be well advised to not give incentives to federal workers doing those kinds of jobs to be the best they can be. host: in farmington, new mexico, a republican. smitty. this is if anybody wants to know how much money we waste, we recently
had a guy in the northwest that won the lottery and took home $800,000 cash and went to his local food stamp office, told them he had won the money and they said he still qualified for food stamps. these people are nuts. the federal government probably has a very minimum -- and i've worked for government and i've worked in the utility industry, which is almost the same as the government, at least 40% overpaid. too many people working. at least 40% more people than they need to do the job. when these people say they're cutting the budget, they're not cutting a pink. they are cutting the growth in government. if congress does not vote themselves raising any more. they get automatic raises. unless somebody has the go nads to say we need a raise this year. they have not done that since they put that into effect. they don't vote on raises and
more. host: your response? guest: i don't agree with all of youro fax ofncts. one can find instances of fraud and waste in the government as one can in any type of organization. we need to do a better job. there's a lot of money being allocated now do program integrity, meaning let's make sure that the money is spent for what it was intended for and not misused in any way. let's crack down on fraud where it exists, because there will be citizens that tried to game the system and sometimes they will succeed. but that does not mean i think the entire system is therefore bad and should be slashed back. host: doug on the democratic
line in virginia. caller: i appreciate you taking my call. why the highway department cannot add a few more cents tax to the cost of fuel and make jobs with that. run the old apartment on what they can collect. guest: there have been proposals over the years to raise the gas tax, which i think is what he's talking about. to pay for the highway program, which is not a popular provision. one of the most sensitive items in the economy is the price of gas. so there are a lot of voters who watched that at the pump every day or every week. so it's not a popular item for politicians to propose, raising the gas tax to fund more highways.
i nee we we need to get to energy independence. i think that's really where we need to go. host: i want to show our viewers what they administration and then what the republicans are proposing in order to avoid sequestration, these automatic spending cuts on the domestic side. the white house says 01-year for all of sequestration and multi- year stimulus package. i think it figures that $50 billion. is that a good idea? guest: i am for deferring the sequester so we can have congress work on a multi-year budget. how that is done is a larger debate. but the big issue in the federal budget is entitlements spending. that's where the action is. that's where the money is. that's where the problem is. it is true that this portion of the budget can take some cuts. we should do it in a careful
way. we should not do an indiscriminate sequestered. i agree with all that. but the budget framework, we need to take on the growing cost of medicare and medicaid and social security. those are the drivers of deficit. if we can come as part of avoiding the the fiscal cliff, put in place a framework where that's done seriously, i would be all for it. host: what about adding new stimulus money? guest: i don't think the previous stimulus was well done. i think it was too have the on government spending and not enough on reducing the tax take of the federal government, putting the money in the hands of the actual households. i'm for allowing the payroll tax deduction that occurred in 2011 and 2012, i support continuing that. if that would put money directly in the pockets of working families. that could actually help the economy. i am dubious that more spending through stimulus type measures
that were enacted in 2009 would do much good. i don't think they did very much good the last time. host: your take? guest: a one-year deferral would be ok. the rest of the package looks good. i think on the stimulus idea, the $50 billion you mentioned, we still have an unemployment rate of 7.7%, which is very high by historical standards. this recovery is very fragile. if we start raising revenues and cutting spending right now in a major way and do it in 2013 as opposed to doing it but doing it more gradually, giving the economy a chance to recover, that is not going to be good. we have to remember that it is not just our debt and deficits we need to worry about. . it is the -- it is the economy.
you want to tackle entitlement issues that jim was talking about. but that does not mean you want to do something big in 2013. host: house republicans, the speaker has put forth a plan to have $300 billion in mandatory savings, $300 billion in discretionary savings. you agree? guest: i think that the big issue is the overall balance of the package, not a specific number for any one piece of it. if republicans agree to something similar to what the president asked for on the revenue front, which is $1.60 trillion of new revenue over the next decade, then democrats would be willing to go along with spending cuts and the president has already put $350
billion at least of spending cuts on the table. host: in medicare. guest: yes, but i think it's got to be a package. host: what the you think of the house republican proposal? guest: i think they should be more aggressive on the entitlement reform side. probably because of the election, they're not asking for as much as they should. the real problem is the operations of medicare and medicaid, how they fit into the larger health-care system. those programs have big problems associated with excess of cost growth related to the waste that occurs in medical delivery generally. the programs need an injection of competition from another program. a consumer-based system where consumers have to select. that's the key ingredient to getting some control over the entitlement programs.
it has been proposed and discussed a lot in the campaign, it's called premier support. i think in general that's where we need to go as part of reform plan. the president does not like that approach. how you go about performinentits is just as important as how you reform them. it's born to be a big part of the budget negotiations. going to be a big part. host: pennsylvania, republican caller, regina. caller: keep in mind you are stealing from social security, which means people cannot take money out of the bank and expect to get compensated at a later date. so it's a very bad program to take that money out of paychecks and distill from
social security. social security is already bleeding. put it where it belongs and put a lock box on social security so they cannot steal it for wars or for the united nations. you can go get your health care from the subsidies or the exchanges, said the lady. an article in the tribune, michael cannon at the cato institute helped policy -- maybe c-span could get him on. host: host: he's been on many times. caller: he says the even with the subsidies, premiums could rise by roughly 25%. all it's doing is making people go away from states where they cannot afford these costs. how about if we go after the united nations and get them out of our budgets? guest: well, i think your first
point was about social security and that we should not touch it. host: referring to the payroll tax, taking money out of it. guest: i assume what she's talking about is there's an earmarked tax called the payroll tax that funds the social security and she feels the government is using some of that money inappropriately. many people are making that argument. if that's your argument, you are in good company. i don't happen to agree with that perspective, because this is just like saying that if all households had two different accounts, one of them that it's only spent on its retirement need to add another that it spent on everything else, money is fungible, so it all comes out in the wash. but that the more complicated discussion. what is happening to health care premiums, i simply don't know what's your evidence is that the
affordable care act will cause an increase in premiums. jim knows more about this than i do, but there are portions of the law that limit how much of the money can go for anything other than actual care. if we think that more people are going to seek care once the affordable care act goes into affect, i suppose that could drive up costs. but there's nothing in the law itself that says that point to happen. guest: it is almost a dead certainty that premiums will go up quite substantially in the exchanges. the reason is the law imposed a rating ban system on what premiums can be charged by insurance companies. many people better individual and small group market today are getting insurance on their own or through a small business, they tend to be younger and relatively healthy. as a result, when the new rules come into play, those people that have insurance today if
will see very substantial premium increases on the order of 25% or 40%. you can ask any insurance executive in the countries that can happen and they will tell you it's true. host: mary in mount pleasant, south carolina, independent. -- larry. caller: good morning. my opinion is this. i don't know why the republicans pick out these entitlement programs. i don't think that's the problem. you guys mentioned something about the stimulus. the president spelled out the banks. they got the money and then they did not start lending it back to us. they keep talking about the government. but if it were not for our government, we would not have anything. the banks cannot loaned money.
we should support having a government-run bank appeared that way everybody could live the right way. they are trying to sell an idea about people being satisfied with oil handout the government gives them and they don't want to work. everybody wants to work and have a decent job. we have to realize bush and dick cheney screwed the country up so bad. it's not the entitlement programs. it is the unnecessary wars that all the money was spent on an independent contractors that it was connected to. guest: i disagree with the caller's point of view on the entitlement programs. in 1972 the federal government spent roughly a 4.4% of gdp on the major entitlement programs. then has risen since that time it 2011 the number was about 10% of gdp.
in another two decades, by 2030, it will be 15% of gdp. that's a very substantial number, a tripling of the size of spending of the percentage of our economy over a 50-year period. the entire budget is being consumed by entitlement programs. there's no way around that mathematics. it's already putting pressure on our fiscal policy today and will put much more pressure on its two decades from now. it is imperative for our country and for our economy and the federal budget, that we seriously address slowing down the pace of that cost. that is critical. that's what they should be talking about in the budget negotiations. host: sweetwater, texas, republican caller. caller: i keep hearing that we are going off the fiscal cliff. as a 65-year-old proud texan, i
don't understand why they want to cut programs from us when they are sending money to countries that don't do nothing for us. if i can live on 800 and something dollars a month -- i'm getting a $9 increase in january, but these people in washington are getting hundreds and hundreds of dollars. why not take a cut in pay? why not quit giving these countries? all that countries then weaken budget what we are going to spend. guest: that's the type of call to get a lot here. host: people concerned about cutting their salaries. guest: we do hear this question a lot. what you do need to understand is that the amount of money that we spent on foreign aid is tiny. we can eliminate it entirely and it would only make a slight dent in the problem.
not nearly enough. similarly, we could totally eliminates any raises for federal workers. we could even cut their pay and again the effects would be tiny. this is fine to talk about, but it does not solve the problem, because it is just a drop in the ocean. host: steve in massachusetts, democratic caller. caller: the home and that was just talking, i disagree with her as far as a drop in the bucket, when you look at curbing government pay. when you guys talk about the areas that get cut, the military spending, discretionary spending, and entitlements, what i want to hear in addition to that is government waste and fraud. when you talk about entitlements, you hear a lot of
people argue about public waste and fraud. government waste and fraud, i think the later referred to it as instances. the gsa had a great deal of money being improperly spent. senator tom coburn has talked about redundancy in programs, senators and congressmen not looking back to see if there is a matrix in place and to see if they're actually working so that nonperforming programs -- host: let's get a response, because we're running out of time. guest: once again, i cannot emphasize enough that i am very much in favor of eliminating fraud and waste and inefficiency. it is hard to do. i don't agree with you that we are not doing it already. and i don't agree wiou